September

5th, 2024
Edition

SPX Monthly Chart

August 2024 ended
with the S&P posting
another month close
above the monthly
moving average line
for a continuing Buy
Signal. With the
continued buy signal,
we’ll look at a stock, a
call purchase, and two
debit spreads.

ASTS
The first profit opportunity we will review is in ASTS, or AST SpaceMobile, Inc. ASTS is
building a space-based cellular broadband network to operate directly with standard,
unmodified mobile devices based on its extensive IP and patent portfolio.
ASTS Monthly Chart
WT If the monthly chart
shows that ASTS closed
above the monthly
moving average line in
May. At that point the
stock price was 8.28.
Three months later,
ASTS rallied through
37.50. The next targets
are 45 and 50.
 ASTS Daily Chart
The daily chart shows that
ASTS was trading inside the
Upper Keltner Channel or
higher from the May low
until the August high. The
current pullback gives us a
buying opportunity.
We recommend buying
ASTS stock at the current
price level.

MDT
The next profit opportunity we will review this week is a Call Option purchase in
MDT, or Medtronic, Inc. Medtronic is a global healthcare technology company.

MDT Monthly Chart

The monthly chart shows

that MDT closed above the
moving average line and
gave us the current buy
signal in July. The next
targets are 100 and 105.
The daily chart shows that MDT just rallied to the highest point on the chart. There
are no signs of a peak in the movement.

MDT Daily Chart

As we said above, we want
to buy a call in MDT. We will
first look at selecting a call
option strike price for
purchasing an MDT Call.
MDT is currently trading at
89.39. Let’s look at buying
the MDT October 18 80-
Strike Call. The Oct. 18
options expire in 42 days.

The Call Option Purchase calculator will calculate the profit potential for a call option
purchase trade based on the price change in the underlying stock/ETF at option
expiration in this example from a 12.5% change in stock price to a flat stock price.
We developed what we call the 1% Rule to help us select an option strike price. The 1%
rule says to limit the time value portion of the option to less than 1% of the stock/ETF
price. If you limit the time value portion of an option to 1%, the stock price only
has to move 1% for the option contract to break even and start profiting.
The calculator will also calculate the time value portion of an option. With this option
purchase, the time value is 0.66 points (boxed in red). The time value of .66 is less
than 1% of the 89.39 price, so this strike price qualifies under the 1% Rule.
s
Buy to Open the MDT Oct 18 80-Strike Call The bottom row lists the
percent return profit
potential. We can see that if
the MDT stock price
increases 1% at option
expiration (boxed in green)
a 2.3% or $23 profit will be
realized. This confirms the
1% Rule of at least breaking
even or profiting with only
a 1% increase in the stock
price.
There is no limit on the Buy to Open the MDT Oct 18 80-Strike Call
profit potential of a Call
Option purchase if the
underlying stock/ETF •
continues to increase in
price. If MDT increases 10%
between now and option
expiration, the Call Option
Purchase Calculator shows
that the 80-strike call will
realize an 82.4% or $828
profit (boxed in green).

On the other hand, if MDT remains flat at option expiration, the 80-Strike Call will
only lose -6.6% or -$66. Remember, if you purchase an at-the-money or out-of-the-
money option and the underlying stock/ETF is flat or down at option expiration, it
could result a 100% loss for your option trade! Using the 1% Rule to select an option
strike price can increase your percentage of winning trades compared to trading at-
the-money or out-of-the- money strikes and this higher accuracy can make you a more
successful trader.
We recommend buying the MDT Oct 18 80-Strike Call at the current price level.

NTRA
The next profit opportunity we will review is in NTRA, or Natera, Inc. NTRA offers
genetic testing and diagnostics with proprietary bioinformatics and molecular
technology.
NTRA Monthly Chart

The monthly chart shows that NTRA

has been above the moving average
line since last November. The next
targets are 140 and 150.
 NTRA Daily Chart
The daily chart shows that
NTRA keeps heading higher.
There are no signs of a peak
in the movement.
We are going to review a Call
Debit Spread trade for NTRA.
Traders who want a more
leveraged approach can buy
NTRA calls.

We can see from Buy to Open the NTRA Nov 15 95-Strike Call
this Call Option Sell to Open the NTRA Nov 15 105-Strike Call
Spread Analysis
that if the NTRA
stock price
declines by -
7.5%, remains
flat, or increases
in price when
the options
expire, the
spread will
make 35.1% or
$260. That’s the
same profit with
a 7.5% move in
either direction!

MMYT
The last profit opportunity we will review this week is a Call Debit Spread in MMYT, or
MakeMyTrip Limited. MMYT is an online travel service company that offers travel
products and solutions in India and the United States.
 MMYT Monthly Chart

The monthly chart shows that

MMYT gave us the current buy
signal when it closed above the
moving average line in July
2023. At that point the stock
price was under 30. Last month
it was over 100.

MMYT Daily Chart

The daily chart shows that
MMYT has been forming a
pattern of higher highs and
higher lows since the chart
started. The bullish pattern
points to a further advance.
We are going to review a Call
Debit Spread trade for MMYT.
Traders who want a more
leveraged approach can buy
MMYT calls.

Buy to Open the MMYT Nov 15 75-Strike Call

Sell to Open the MMYT Nov 15 85-Strike Call

We can see from this Call

Option Spread Analysis that if
the MMYT stock price declines
by -.5%, remains flat, or
increases in price when the
options expire, the trade will
make a 37% or $270 profit. If
MMYT is down -7.5% at
expiration, the trade will still
make 37% or $270.
 Want to Learn More from Chuck
Hughes? Click the Banner Below

This week we recommended the following:

Buy ASTS Stock
Buy to Open the MDT Oct 18 80-Strike Call
Buy to Open the NTRA Nov 15 95-Strike Call
Sell to Open the NTRA Nov 15 105-Strike Call
Buy to Open the MMYT Nov 15 75-Strike Call
Sell to Open the MMYT Nov 15 85-Strike Call

Note: Profit performance displayed in this newsletter does not include commission
cost. Prices are based on Thursday End of Day unless the market is closed.

We’ll see you next

week!